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Union: Eskom increase inevitable

Feb 05 2013 17:26 Sapa

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Johannesburg - South Africans will have no choice but to accept Eskom's five year tariff hike, trade union Solidarity said on Tuesday.

Researcher Paul Joubert said the monopolistic structure of the electricity market made it impossible to know whether the prices Eskom and energy regulator Nersa agreed on would be appropriate.

Last week, the National Energy Regulator of SA (Nersa) held hearings into the proposed increase.

Eskom has asked for a 16% increase in electricity prices each year for the next five years.

The proposal will more than double the price of electricity in five years, taking it from 61 cents a kilowatt hour in 2012/13, to 128 cents a kWh in 2017/18.

Joubert suggested that independent electricity generators be allowed into the energy market.

"[We] submit that the electricity generation space be opened up for independent generators to directly conclude agreements with consumers or local distributors of electricity, with Eskom's only role in such transactions being facilitating the "wheeling" of the electricity over the transmission network for a nominal fee," he said.

"By limiting the freedom of other possible investors in the electricity generation market to attempt to beat these forecasts, and possibly profiting due to superior ability, Eskom, Nersa and the government are acting to the detriment of South African consumers," he said.

Joubert said any mistakes that Eskom and Nersa made over previous hikes affected consumers who, except for the option to generate their own power, had no choice but to buy electricity from Eskom.

"However, it is clear from comparing assumptions that both Eskom and Nersa have made in the past to what actually transpired, that they are not very good at getting forecasts right even over an horizon of two or three years, to say nothing of doing it over five years, or over a period of several decades," he said.
solidarity  |  nersa  |  eskom  |  electricity tariff hike

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